Barrons weekend update: positive on UHAL
Cover story: The growing combination of semiconductors and miniature engines stands to transform tasks as basic as charging a smartphone or cooking an egg, or as complex as scanning for colon cancer or powering flying drones on long journeys; Companies that stand to benefit from the trend include AMAT, WATT, IDTI, and NXPI.
1) Positive on UHAL: Company's chief executive pays no attention to Wall Street, doesn't manage earnings, rarely meets with investors, and gets paid modestly, part of a thrifty corporate culture that has helped U-Haul dominate the industry;
2) Picks from the Barron's Art of Successful Investing conference participants include CCL, SHPG, CLS, LIOX (Scott Black); MSFT, GOOGL, PIC, V (William Priest); SNE, HRI, HRS, MSG (Mario Gabelli); NOMD, EVTC, COMM, ANIP (Oscar Schafer); WHR, LNC, MSCC, GT (Andrew Wellington); and WFC (Jerome Dodson);
3) Cautious on TWX: Shares are up on a possible T merger, but while not overpriced they don't have much upside, and could slide if the deal falls through or is priced below what investors expect.
Trader: The "Dogs of the Dow" strategy-in which investors put equal dollar amounts in the 10 highest-yielding Dow stocks at year-end and hold them for 12 months-has returned an average of 10.6% annually over the past 10 years; Positive on AGN: The market's concerns about the maker of Botox are more related to industry issues than company problems, and shares could have 20-30% upside over the next year or two.
Profile: Scott DiMaggio and Doug Peebles, co-managers of AB Global Bond fund, use fundamental and quantitative analysis teams to form distinct views, after which investment decisions are made.
Small Caps: Positive on Lanxess: German chemical company's acquisition of Philadelphia-based CHMT will make it a less-cyclical and higher-margin company, and shares currently look cheap.
Follow-Up: Positive on CAT: New chief Jim Umpleby, a company veteran, will probably cut costs as he tries to get the company back on track, and investors should hold shares until next year to see if he sparks a rebound.
European Trader: Positive on Danone: The company's new focus on sustainable, profitable growth could translate into double-digit earnings growth in 2017 through 2019.
Asian Trader: A study from MS found that investors in Asia are increasingly looking for companies that score high on socially and environmentally responsible metrics, such as Astra International, SM Investments, City Development, and Unilever Indonesia.
Emerging Markets: Investors should expect more bond issues from Saudi Arabia, where a war with Yemen is putting pressure on a budget that is already supporting major economic reforms.
Commodities: Gold, which rose by 29% during the first seven months of 2016, making it one of the year's best performers, is losing its glitter amid concerns about a Fed interest rate hike.
Streetwise: Gluskin Sheff's David Rosenberg says the ability to borrow money at lower interest rates has added five percentage points annually to profit growth, though that doesn't mean the S&P 500 is destined to lose nearly 20% of its value with a rate hike.